July 28, 2011
Nation sport issue features me, some other people
For any readers here who are subscribers to The Nation magazine, I have an article in the just-out sports issue on why cities persist in chasing stadium and arena deals, when so much evidence shows that they're usually a waste of money. (It's online, but for subscribers-only.)
Of course, if you're a Nation subscriber you probably already know that. So if you're not a Nation subscriber, you can sign up in various formats here, or just buy a copy at your local store that sells magazines, if you still have one of those. (I'm trying to find a way to order a single copy of the sports issue online, but the closest I've come so far is a Nation baseball cap.)
Or if you don't want to read my article, you can always just admire the names of the other contributors. I've always wanted to share a table of contents with Noam Chomsky, John Sayles, and Mark Cuban...
Sacramento arena task force grasping at every funding straw in the book
Hey, how's that Sacramento Kings arena mega-task-force coming along? Any ideas for how to actually, you know, pay for a Sacramento Kings arena? What's that you say, Sacramento Bee?
Aides to Mayor Kevin Johnson say they're focused on user fees such as ticket surcharges for people who attend arena events. That revenue could be coupled with event-night parking fees at downtown garages, new corporate sponsorships, and up-front money from private companies that could build and operate the arena for the city.
Another idea: The city could sell up to a dozen parcels that it owns to developers, raising $30 million to $60 million, according to a financing update that will be discussed today at a meeting of Johnson's 70-person regional arena committee. The report does not indicate which parcels those are.
Officials say they're even considering renting the arena's rooftop to telecommunications companies for cell towers.
Even added together, though, these funding streams don't seem likely to generate more than $10-20 million a year, which won't pay the nut on a $387 million arena bill. More important, they're revenue streams that the Kings owners are going to want to control themselves — a ticket tax, in particular, reduces the amount that the team can itself charge for tickets, so the Maloofs are quite likely going to see this as a tax on them. Which might actually be fairer, since they'd be the ones reaping the benefits of a new arena, but if this were about fair, we wouldn't need the talcum powder.
Alberta opens door to funding Oilers arena
Hey, remember that bit about Albert Premier Ed Stelmach saying he wouldn't put provincial funds into a new Edmonton Oilers arena? Apparently he's found a loophole:
Stelmach said the city is free to use money from an existing program called the Municipal Sustainability Initiative, noting municipalities can use the proceeds for any public infrastructure.
However, it would be up to the city to decide whether the money should go to the proposed arena rather than roads and bridges or other projects.
"It's an existing program," Stelmach stressed. "The program was available from day one."
And Edmonton might actually not have to choose between an arena and new roads, because Stelmach said he'd consider adding more money to the fund after he has a look at its finances.
If true, this could clearly be a huge breakthrough in the Oilers arena plan, which has been stalled for months because of a $100 million funding gap. Or, if you're a glass-half-empty kind of person, it could be another $100 million in public subsidies added to the existing taxpayer tab. But I'm sure none of our readers want to be that sort of person.
Orlando Magic gyms bleeding red ink, forcing service cuts
When team owners are looking for hundreds of millions of dollars in stadium or arena funds, they'll often offer to throw a few million dollars at some community improvement to help grease the skids. So it was with the Orlando Magic, which build five community gyms as part of its deal to get its new $480 million arena in 2007.
Only one problem, the Orlando Sentinel has discovered:
However, these new gyms are also going to cost taxpayers twice as much to run as the county originally estimated, a review of budget records shows. Instead of breaking even, the five facilities are expected to generate a $1.25 million annual deficit to operate, once user fees are balanced against staffing and other costs.
After-school and summer programs at other facilities would continue to be capped or shrink to offset most of the steeper operating costs at the Magic gyms.
"The community was told these were going to be a bonus and not take away anything," Commissioner Ted Edwards said. "The residents didn't get what they were promised."
Apparently one county commissioner, Tiffany Moore Russell, warned about this possibility back when the deal was first being discussed, but she was outvoted. She was not immediately available to the Sentinel, it seems, for "I told you sos."
L.A. council hears latest AEG stadium finance plans
Amidst all the excitement about the new NFL labor deal and what it means for stadiums, AEG and the city of Los Angeles on Monday announced a revised stadium financing plan, which was the subject of a city council hearing yesterday.
The new plan is being sold as shifting more of the cost to the developer, but it's not actually clear that it would do that. In the old deal, the city would have sold $350 million in bonds to demolish and rebuild part of its convention center to make way for the new stadium; in the new one, the city would only sell $195 million in bonds, while AEG would sell another $80 million. However, the revenue to repay the bonds would still come from the same place: lease and tax revenue generated by the stadium project, including property tax revenue that would normally go to the city. In other words, it's still a TIF.
The advantage of the new deal is that the $80 million wouldn't be on the city's books, so if the money didn't come in and the bonds went into default, it would be AEG on the hook, not taxpayers. Still, it's more a case of putting a cap on a subsidy than eliminating one entirely.
At yesterday's hearing, predictably, no one could agree on what the new plan meant: Councilmember Jan Perry said the plan would not "cost the taxpayers a dime," while her colleague Bill Rosendahl warned that it was "very risky." The Contra Costa Times reports that most of those who spoke were in support of the project, though it's not clear whether they mean members of the council as well.
Meanwhile, Sam Mellinger of the Kansas City Star is taking all this L.A. activity as a sign that AEG doesn't love Kansas City anymore and isn't going to work to bring them an NBA or NHL team. Which would be news, maybe, if not for the fact that AEG's lease means it already has no real incentive to bring a sports franchise to Kansas City to begin with.
July 26, 2011
The NFL's new stadium fund explained (sort of)
With the NFL lockout finally over, the blogwaves are afire with talk of how the league's new collective bargaining agreement will affect various teams' stadium campaigns. We've already seen a report that the San Diego Chargers could get up to $150 million in NFL stadium funds, another that the San Francisco 49ers and Raiders could pool their stadium credits to get $300 million for a shared stadium, and still others that AEG's planned Los Angeles stadium could get a cut. (The Minnesota Vikings could also be in line for funds, though apparently they've already been counting that particular chicken before it hatched.)
So how much money is really available, and where is it coming from? The press reports are maddeningly incomplete and contradictory, but this is, to the best of my knowledge, what's going on:
- Back in olden times, the NFL had a program called "G-3," which allowed home teams to keep the visitors' share of club seat revenues to use to help pay off new stadium costs. Initially implemented to help convince NFL teams to remain in large markets — it was originally concocted, in fact, by New England Patriots owner Robert Kraft, who limited it to the top six media markets, of which he just happened to play in #6 — it was eventually expanded to the whole league. Then the program ran out, and the flow of funds stopped.
- The successor to G-3 — which, sadly, won't be called G-4 — instead takes a 1.5% cut off the top of NFL revenues, and allocates it to stadium projects. (Sources disagree over whether this comes entirely out of the players' share or the owners would contribute as well.) At $9 billion a year in total league revenues, that would imply $135 million a year in stadium credits — though apparently the math isn't nearly so simple, which may explain why this article says only $95 million. Still, that's a huge amount of money, enough over ten years pay off about $734 million in stadium bonds. (It's not $950 million in stadium bonds because payments ten years from now aren't worth the same as payments now.)
- That huge number notwithstanding, scuttlebutt is that only three teams will be allowed to tap the new stadium loan fund, with rumors putting a cap at $150 million per team. That'd mean that from among the 49ers, Raiders, Vikings, Chargers, any team moving to L.A., and maybe the Jacksonville Jaguars, at least a couple of teams would get left out in the cold. Unless the NFL expanded the program again, which it seemingly would have the money to do.
All in all, this is a good thing for both teams wanting to build stadiums and for taxpayers not wanting to put their own money into stadiums, as this is the NFL recognizing that — because of its weird status as a league where the vast majority of revenue comes from national TV contracts — if it wants to encourage teams to stay in big markets and avoid killing the Fox golden goose, it needs to subsidize stadiums with its own money. Of course, it also could end up helping grease the wheels for some otherwise stuck stadium projects that would still involve some taxpayer money — $150 million per stadium doesn't go all that far — so in that sense, not so good. But in the grand scheme of things, billionaires voting to spend some of their own billions on projects to increase their billions is nothing to sneeze at.
July 25, 2011
Marlins stadium to create jobs at stunningly tepid rate
Today's Miami Herald headline:
Marlins' new stadium brings jobs, new business opportunities
If you've read this site at all, you know that we've heard this song before. But, hell, I'm game: What would those jobs and business opportunities be, exactly?
Scroll down past the first seven paragraphs, past the discussion of "thermoplastic white membranes" and 24-foot aquariums, and you get to this:
Through late May — the time of the Marlins' most recent analysis — the project had employed 3,807 workers, nearly all of whom have been on assignment multiple days or weeks. About 700 are working on construction now, about 200 less than during the height of heavy lifting.
Okay, construction projects employ construction workers — that's hopefully not exactly news. And if Miami were building anything else — schools, highways, space elevators — the same would be true. What else?
"You're getting close to 1,800 to 2,000 people per game," [Marlins VP Claude] Delorme said. That includes 1,200 workers on the food services side, about 400 on stadium operations (everything from security to grounds-crew to ushers), a cleaning staff of about 60, another 80 people involved with parking and dozens of others for ancillary jobs. obviously, a lot of those job are simply being shifted from Sun Life Stadium to the new ball park.
So, maybe 2,000 people on game days — which is only 81 days out of the year. Even if you assume that some workers (ticket sellers, grounds crew) need to work year-round, we're still down to almost certainly less than 1,000 full-time equivalent jobs; and "a lot" of those will just be replacing people currently employed at Sun Life Stadium.
Let's be extremely generous here, and assume the equivalent of 500 new jobs as a result of the stadium. At $478 million in public subsidies, that's just about exactly $1 million in taxpayer money per jobs, a ratio would be worse than just about any other economic development project on the planet. At this rate, that helicopter idea sounds better and better.
Of course, we still haven't gotten to the "business opportunities," which come down to ... um, a guy with a food cart who's been selling burgers and churrasco to the construction crew, and says he's "hoping to stay when the stadium opens."
The real point of the article, needless to say, is to let Delorme go on about all the stuff that will be available at the new stadium (Cuban sandwiches! Cuban pastries!). Save your time, and re-read the six big lies about the Marlins stadium instead.
Daily News says Islanders arena plan too risky
With one week to go before the New York Islanders arena referendum, the New York Daily News has entered the debate, with an editorial this morning saying "the deal would be a bonanza for team owner Charles Wang while saddling taxpayers with huge risks." Most of the arguments (the county would be risking public money with no guarantee of getting repaid, sales tax receipts would be partly cannibalized from existing county money) are pretty much dead on point, though the editorial does go a bit overboard at the end; for a more in-depth analysis, see my article for the Village Voice site.
The question remains, meanwhile: The Daily News? Really? New York's biggest tabloid isn't exactly known for its eagerness to buck the political powers that be, so there are a couple of possibilities here: The powers involved being on Long Island, it's easier to write from scruples rather than realpolitik; or maybe the News is trying to tweak rival Newsday, whose owner, James Dolan of Cablevision (and the New York Knicks and Rangers) has endorsed his hockey rival's arena plan. Either that, or the Daily News just wants to make kids cry.
Meanwhile, Islanders owner Charles Wang took to the pages of Dolan's paper to declare that a vote for his arena is really a vote for Long Island, and added this tidbit:
Although singer Rihanna played the Coliseum last week, Wang said some top musical talent, which he didn't identify, has refused to appear in the arena because of its condition. The new arena would have at least 17,000 seats and 50 luxury suites, compared to the Coliseum's 16,600 and 31 suites.
"What acts look at is the size of your building. So if you could go to Brooklyn and it's got a thousand more seats or 1,500 more seats than the current Coliseum, where is that act going? They're going to get the same people. People from Long Island . . .," said [Islanders VP Michael] Picker.
I haven't been to a concert at the Coliseum in more than 20 years, and I'm not top musical talent, so I can't comment on the fitness of the existing arena. But if we're really talking about spending $400 million to add 1,500 seats here, then — in the words of one act I saw there — maybe there's another way to do this.
July 22, 2011
Oilers, Chargers funding gaps remain unfilled
Another week, another batch of stadium and arena projects that lack nothing except for somebody willing to spend hundreds of millions of dollars to build them:
- The Edmonton city council held another hearing about the proposed $400 million Oilers arena on Wednesday, and came to the same conclusion as last time: It's $100 million short, and nobody knows who'll pay for it. (The city has asked the province for the money, and Alberta premier Ed Stelmach has said no way.) Also, Northlands, which owns the Oilers' current Rexall Place arena, is (unsurprisingly) refusing to sign a non-compete clause with any new arena. "We basically have two parties here that are refusing to cooperate and we are stuck here in the middle," councillor Kim Krushell told reporters. "All I can say is everything seems to be a bit of a gong show." Which either means Krushell watched a lot of TV in the 1970s, or perky Canada has its own metaphors.
- The San Diego Union Tribune ran an interview with San Diego Chargers stadium campaigner Mark Fabiani yesterday, in which Fabiani revealed that the team needs a new funding plan now that the state is forcing the city to hand over tax money that was otherwise redirected to regional development authorities. Fabiani said that "[we] need to find a way to bridge the financing gap between now and 2024 -- possibly with the help of other government agencies in the region that may see long-term benefits from this kind of multi-faceted downtown project." Which sounds a heckuva lot like "we have no idea."
July 21, 2011
Raiders, 49ers double down on stadium demands
In case you missed it — and judging from my email inbox this morning, not many of you did — the San Francisco 49ers and Oakland Raiders have finally bowed to the wishes of the NFL and begun discussing a shared football stadium, a la what the New York Jets and Giants pulled off in New Jersey:
"We've put our teams together," 49ers Chief Executive Jed York said late Monday at an event for NFL fans in Los Angeles. "It doesn't mean we're going to find the right deal that fits for both teams, but we're certainly going to get a look at those options."
The Raiders appear amenable to a partnership. "We have said repeatedly that we have an open mind with respect to our stadium solution," said Raiders chief executive Amy Trask, also on hand for the "NFL 101" event, held at the Los Angeles Coliseum. "An open mind means an open mind as to sharing a facility with the 49ers. I say to Jed regularly that we should have not only an open mind to the sharing of the facility, but to the location of the facility which we might share. And so there are a lot of options for us to consider."
The key phrase there, obviously, is "the location of the facility." The 49ers have been focused on Santa Clara, but that's been on hold since last fall due to financing holdups. (Though if the NFL settles its labor situation this week as rumored, that should help clear things up there some.) The Raiders, meanwhile, have been mumbling quietly about a new stadium in Oakland, but not much has been heard on that front since Oakland's stadium authority announced a feasibility study almost a year and a half ago. San Francisco is still pushing its own stadium plan, meanwhile, and there are plenty of other cities in the Bay Area within driving distance of Oakland and SF on a Sunday afternoon, if it comes to shaking loose new ideas.
Reading tea leaves, it seems like the pact between the two Bay Area teams is on the one hand an admission that in the current economic climate (and California's current budget mess, not to mention its laws about public referendums for taxpayer-subsidized projects), neither team has a great shot at getting a stadium built on their own; and on the other, a show of force that could be used to pit local governments against each other in a bidding war. After all, if you're the Oakland-Alameda County Coliseum Authority, which is more likely to light a fire under your butt: The Raiders asking for a new stadium, or the Raiders and 49ers saying, "You can have both of us together, or else we're both heading to the South Bay?" It's all about the leverage.
July 19, 2011
Rays' Maddon, Silverman: All the other kids are laughing at our stadium!
Out of nowhere, the Tampa Bay Rays have turned up the heat on their stadium demands — with some unlikely members of the organization taking the point. First came this salvo from Rays manager Joe Maddon:
"This ballpark is improper for Major League Baseball. ... You shouldn't play with all these obstructions, and all these caveats. Of course not. It's run its course. It was here for a moment. It served its purpose. And now it's time to move on. Absolutely it is. And to deny that, everybody has just got their head in the sand, period. ...
"This is a great place to raise a family and for me it's a great place to have a major-league team — the Tampa Bay area. So looking down the road I would hope that people have enough foresight to construct the new ballpark in the right place that maintains us here for many years, and permits us to build this [organization] into what we can. It's already pretty darn good — we could make it even better with the right facilities.
"The new ballpark would have to be retractable. To do otherwise would be economic suicide — it's uncomfortable, the rain, the disruptions with the game, the disruptions with your work. All that stuff would be counter-productive. If you’re going to do it, do it right. Do it right, man."
Rays team president Matt Silverman then followed up with this:
"Joe speaks from the heart, and I agree with what he said. It's hard to combat the national media's depiction of our stadium. Our situation has become a distraction. It is affecting the clubhouse, and it spills over onto the field of play. It damages the national reputation of St. Pete and Tampa Bay, and it harms the Rays brand. Clearly, something needs to be done."
The apparent trigger for all of this was this incident during Sunday night's nationally televised game, in which a foul ball shattered a light, showering the field with broken glass. ESPN announcers picked up on the "Tropicana Field is a dump" theme, reporters asked Maddon what he thought of it, and it was off to the races.
There's no doubt that Maddon and Silverman would love a new workplace — hey, who wouldn't? — but some of their complaints border on the bizarre: Rain is a "disruption to the game"? Rays players can't focus on baseball because they're worried that other cities are making fun of them? And, for that matter, how exactly is a shattered lightbulb — the first in nearly 14 seasons of games at the Trop — an indication that the whole place needs to be torn down (as opposed to, say, switching to sturdier light fixtures)?
The whole incident is weirdly reminiscent of the falling beam incident at Yankee Stadium in 1998, which turned out to mean nothing in terms of the stadium's structural integrity (it was actually an "expansion joint" that had worked loose, and a subsequent inspection by the city Buildings Department found that the stadium was in fine shape), but sparked a citywide debate about where and when a new stadium should be built. Then-Mayor Rudy Giuliani opted for a Manhattan location, it was summarily shot down, and he instead proposed a new stadium in a public park across the street from the old one in the Bronx; that was shot down at first by incoming Mayor Michael Bloomberg as well in 2002, but Bloomberg revived the plan three years later — helped along by Yankees lobbyists whose salaries, under a lease drawn up by Giuliani, were paid for by city taxpayers.
In any case, St. Petersburg Mayor Bill Foster replied with his usual trump card: "They have 15 years left on their lease agreement ... so yeah, I'm holding on pretty tightly. If they want to look at sites within Pinellas County, I'm all for that." The problem with that argument is that it makes Foster look like an obstructionist who's only concerned with who gets to play host to a new stadium, not whether one is needed, how much should be spent, or most important, who should pay for it.
The real question that should be asked, meanwhile, is if the Trop is really "improper for Major League Baseball," why so many teams threatened to move there in the '80s and '90s in order to extract new stadiums from their home cities (off the top of my head: the White Sox, Indians, Giants, Rangers, and at least two or three more that I'm forgetting); not to mention why MLB ultimately gave St. Petersburg an expansion franchise in 1998 despite knowing where their home park would be. Has the definition of "improper" really changed that much in 13 years? If rain is now an unacceptable distraction, I guess maybe...
UPDATE: Now Maddon thinks that "doing it right" should include two stadiums covered by the same sliding roof. Give the man credit, when he fantasizes, he fantasizes big.
After a two-week government shutdown, the state of Minnesota finally has a budget deal, albeit one that mostly kicks the tough decisions into the future by closing the budget gap by borrowing from future revenues. Still, that means that the Vikings can finally stop waiting and get moving on that stadium bill that, we were promised, would be the next thing on the legislative agenda once the state's checkbook was back in operation.
Only now it turns out it won't be:
Sen. Julie Rosen, R-Fairmont, said that the stadium bill could be acted on during a special session later this year, perhaps in the fall. She said that she remains "strongly committed" to the bill, along with Gov. Mark Dayton and House sponsor Rep. Morrie Lanning, R-Moorhead.
"We will have a vote on [the stadium bill] and we'll work to get it passed," Rosen said. "But if I tried to get a vote on it right now, I'd be strung up."
Rep. Michael Nelson, one of Rosen's co-authors on the stadium bill, elaborated on why Rosen was worried about a lynch mob: "There's not a lot of support for cutting people off health care, cutting jobs, then turning around and authorizing bonding for a stadium."
Rosen's boundless optimism aside, the odds on a Vikings stadium bill passing this year are getting pretty long: There's no guarantee that Gov. Mark Dayton will even call another special session this fall, for one thing; for another, there's still a $231 million funding gap; for third, there's still the threat of a referendum campaign to force a public vote.
If I'm the Vikings owners, I start drawing up plans for a short-term lease extension at the Metrodome for beyond this year; it's not like a new stadium would be ready for 2012 anyway, so they're going to need to play somewhere. Just don't tell the voters or legislators — that'll take away one of your best meaningless deadlines.
Montreal Impact stadium bids too high, ask again later
It looks like an innocuous enough article, noting that the expansion of the Montrreal Impact's Saputo Stadium will be delayed a couple of months, forcing the team to begin its first MLS season next spring at Olympic Stadium. Down in the fine print, though, there's some cause for concern:
Team president Joey Saputo and vice-president Richard Legendre, responsible for the stadium, met the media prior to Sunday's North American Soccer League game against the Atlanta Silverbacks to announce a second call for bids concerning technical specifications for infrastructure will proceed next month after what was deemed "unsatisfying results" with initial proposed bids.
"The cost was globally too high," said Saputo. "It is not a question for us to exceed the total public money awarded (by the Quebec government) for the expansion project.
"We have worked hard over the last few weeks with the different people involved to find solutions to expand our stadium to 20,000 seats, under a roof, while respecting the initial budget," he said.
So what's actually happened is the province put up $23 million for the stadium expansion, but nobody was willing to actually do the job for that price. Legendre said he's confident that a second set of bids will bring the price down, and maybe he's right — but if not and there are cost overruns, it's going to be interesting to see who pays for them.
July 14, 2011
MLB mulling Dodgers downtown move?
Rumors of a combined Dodgers-NFL stadium deal in Los Angeles is back in the mill again, this time courtesy of Sports By Brooks:
In the past 48 hours multiple sources have confirmed to me that MLB has reached out to AEG to inquire about the possibility of the company assisting the league - and the next permanent owner of the team - in building a downtown ballpark for the Dodgers.
AEG already owns the Staples Center in downtown L.A. and has proposed a plan to the city of Los Angeles to build an NFL stadium in the same area - along with the renovation of a wing of the city's dilapidated convention center.
A downtown Los Angeles stadium for the Dodgers would theoretically satisfy MLB's desire to completely extract McCourt from any financial interest in the franchise while also boosting the financial fortunes of AEG's L.A. Live development.
Note that unlike the last time something like this was rumored, it was as a land swap, with AEG building on the current Dodger Stadium site with its plentiful parking, and the Dodgers going downtown. This time, it sounds as if the idea is to put both baseball and football downtown, though lord knows where you'd fit them both, while leaving Dodgers (and Dodger Stadium) owner Frank McCourt entirely out in the cold.
Both MLB and AEG have issued denials, but you'd expect them to, whether there's any truth to this or not. More to the point, as MSNBC's Craig Calcaterra writes, is that the latest rumor doesn't make a damn bit of sense:
I know about the football stadium thing people have talked about for downtown, but set your McCourt hate aside for a minute and ask yourself, what possible support could there be for a downtown stadium project for the Dodgers? And don't tell me that it's all AEG money, because no stadium project — not even the vaunted AT&T Park — is 100% privately financed. There would be tax abatements lobbied for and obtained. There would be infrastructure improvements required. Millions of public dollars would be spent on any stadium project, no matter what the press releases say about it being privately financed.
There is a gleaming, wonderful baseball stadium in Chavez Ravine that no one could sanely claim requires replacement for any reason other that the McCourt mess and the unsavory possibility of him being the landlord for any new Dodgers owner. But the McCourt mess is neither the fault nor the responsibility of the people of Los Angeles. It is the fault and responsibility of Bud Selig and Major League Baseball, who let this irresponsible jackass into the club.
If, in an effort to solve this problem, they push for the abandonment of Dodger Stadium and the construction of a new ballpark, it will be perhaps the most craven, cynical and shameless undertaking attempted since Selig took over. Sure, we can all identify a way in which Dodger Stadium is not ideal — traffic; location — but no sane person would have ever suggested its replacement absent Major League Baseball's Frank McCourt problem. As such, this kind of proposal is the equivalent of burning down the village in order to save it.
Calcaterra allows that it could be a bluff to scare McCourt into accepting a deal to relinquish the Dodgers, but notes that "a bluff is only as good as the target’s belief that the bluffer is willing to go through with it," making this one not so useful. Not that that's stopped Selig before.
Nassau exec accused of illegal Islanders arena campaigning
It's behind the Newsday paywall and I haven't been able to find it on the newspaper's mobile site (which is paywall-free), but a story yesterday by reporter Celeste Hadrick charges that Nassau County Executive Ed Mangano has been leading a "vote yes" campaign out of his office and with public employees, in violation of state law.
The Association for a Better Long Island, a business group that opposes the $400 million arena plan, is now asking for the Nassau district attorney to investigate:
ABLI Executive Director Desmond Ryan stated, “It's simple. It's illegal. In fact, it's a felony. State law specifically forbids public employees from working on 'company time' in government buildings for the purpose of advocating on behalf of an elected official or a public referendum. It’s an abuse of the public trust and it is a violation of basic government integrity that taxpayers have a right to demand."
More news as I can dig it out from the Newsday servers.
Seattle pols launch arena task force
Put down Seattle as the latest city that, with no particular ideas for how to fund a new sports facility, has instead created a task force:
Now, lawmakers are getting more involved, beginning with the formation of the Sonics Taskforce.
State representatives Mike Hope (R-Lake Stevens) and David Frockt (D-Seattle) led the taskforce meeting on Monday, presiding over a brainstorming session with the goal of finding ways to fund a new arena in or around Seattle. The goal, they say, is to bring the NBA/NHL to Seattle with a plan that involves no additional tax-payer money.
Good luck with that, given that a new arena is expected to cost at least $300 million, and any NBA or NHL team would want the revenues for themselves, not see them go to pay back private investors. SBNation says, "While the meeting was preliminary, it's a good sign for a possible arena deal somewhere down the line," which I guess is fair enough, if your definition of "somewhere down the line" is broad enough.
July 13, 2011
Selig: No news is no news on Rays, A's stadiums
It was the MLB All-Star Game last night — one or the other team won, which actually isn't something to take for granted — and so time for commissioner Bud Selig's annual stream of non-statements to the press. Among the stadium-related tidbits gleaned by the horde of All-Star reporters:
- The St. Petersburg Times got Selig to agree that he "did take exception" to St. Pete mayor Bill Foster's April pronouncement that he was prepared for "all of the Selig tricks that have been used successfully elsewhere."
- Contraction is off the table, according to the San Francisco Chronicle's John Shea, though it's not clear whether this means forever or just for the current CBA.
- Selig looks to be in no hurry to resolve the Oakland A's territorial-rights standoff with the San Francisco Giants, telling baseball writers that his A's relocation task force, currently in its 28th month, has "spent a lot of time on this, an enormous amount of time - and are still spending an enormous amount of time. And as I told both clubs, this is another situation where it's better to get something done right than get it done any faster. ... We're working all that out. The committee has come back. There's a myriad of options. There's a lot of stuff we studied. The one thing I want to be sure about is to look at every conceivable option and analyze all of them."
In other words, status quo. A's owner Lew Wolff was not immediately available for impatient grumbling.
Bengals stadium: Worst. Deal. Ever?
Good, long article in yesterday's Wall Street Journal on the financial woes of the Cincinnati Bengals' Paul Brown Stadium — or rather, the financial woes of Hamilton County, which built the place in 2000 and within four years was suing on the grounds it had been hoodwinked into a sweetheart deal. Among the article's highlights:
- The initial $280 million price tag ultimately swelled to $350 million (if you believe the Bengals), or $454 million (according to the county), or $555 million (according to Harvard stadium expert Judith Grant Long, whose long-awaited book Full Count, I am assured, really is due out any month now). This last figure would set a record for public subsidies for an NFL stadium.
- As a result, the county has been facing steep debt payments: $34.6 million in 2010, equal to 16.4% of the county budget. As a result, the county has been slashing funding for things like schools, the sheriff's department, and youth programs, and is now set to repeal the property tax reduction that was the carrot to get county residents to approve the Bengals stadium (and an accompanying Reds stadium) in the first place.
- Hamilton County hamstrung its own finances by agreeing to let the Bengals collect all parking revenues at the new stadium, while the public picked up all security costs. The team put pressure on the county by saying it would move to Baltimore without a sweetheart deal — but documents from the time indicate that Baltimore's offer was capped at $200 million in public funds, and would not cover operating costs.
- Even on the field, the new stadium has underperformed: "The Bengals had said that with a new stadium, the team's revenue would increase, allowing it to sign better players, win more games and attract more fans to the area. In 2000, the new stadium's first year, the Bengals had the same record they'd had the previous year, 4-12. Since then, the team has managed just two winning seasons in the new facility. Its attendance levels have actually dropped."
The problem, it seems, is that unlike in other municipalities, Hamilton County footed the entire stadium bill itself — and counted on a 0.5% sales tax hike to make the bond payments. When sales tax revenues didn't grow at the rate the county had hoped, it was left with a budget hole that's grown progressively larger.
(The Bengals have since responded with a two-page letter that asserts that it's the county's fault for making a lousy deal, and anyway the real problem is the county took part of the sales-tax proceeds and wasted it on things like roads and public schools.)
One hopes this will be a cautionary tale for other local governments negotiating leases, but it probably won't be, for reasons already discussed here. In case any local elected officials with lease talks on their agenda are reading this, though, here's a handy crib sheet of quotes from the WSJ report on the Bengals fiasco to reference in your hearing testimony:
"The Cincinnati deal combined taking on a gargantuan responsibility with setting new records for optimistic forecasting," says Roger Noll, a professor of economics at Stanford University who has written about the deal. "It takes both to put you in a deep hole, and that's a pretty deep hole."
"It's the monster that ate the public sector," says Mark Reed, Hamilton County's juvenile court administrator.
Tom Luken, a former Cincinnati mayor and councilman, actively campaigned against the deal. "Anybody with half a brain can figure that this is a bad deal," he says. "As it turned out, it was even worse than they painted it."
And finally, the punchline: Hamilton County commissioners are set to vote today on spending another $307,000 on the stadium, to upgrade its instant-replay system from analog to digital — stadium upgrades being the county's responsibility as part of that lease that taxpayers arm-twisted the Bengals into accepting. Next step: holography!
July 12, 2011
Marlins shut upper deck for good
The Florida Marlins, finally bowing to reality, have announced that they're closing the upper deck at Sun Life Stadium for the rest of the year. Any fans who've bought seats there for upcoming games — sorry, both fans who've bought seats there for upcoming games — will be upgraded to the lower deck at no cost.
The Marlins had already taken this move for all but Friday and Saturday games, and you have to wonder why they even left it open then — the Oakland A's already tarped over their upper deck years ago — but better late than never, I suppose. Still, it's going to be very interesting to see how much Marlins attendance rebounds next year when their new stadium opens; or perhaps more to the point, whether the initial wave of curiosity-seekers stick around in 2013. History shows that the best way to get an extended honeymoon period for new stadium attendance is to put a winning product on the field, which doesn't bode well for the Fish.
Liverpool row over Anfield gets heated
Staffing constraints usually keep me from covering European stadium campaigns, but it's tough to ignore the news out of Liverpool, where the owners of Liverpool FC are likely abandoning plans to expand Anfield, the site where they've played for the last 119 years, and instead will likely look to build a new stadium in a nearby public park.
Making things especially interesting is that Liverpool is owned by the Fenway Sports Group, aka Boston Red Sox owner John Henry. And while Henry initially said he would prefer a Fenway-style rehab of Anfield, team exec Ian Ayre now says that's unlikely to happen:
"Land/property acquisition, environmental and statutory issues are creating barriers to our ambition.
"It looks increasingly unlikely there is any way we can move forward on a refurbishment of Anfield."...
"In terms of a Stanley Park stadium versus redevelopment, there is absolutely no question that a refurbishment of Anfield would come at a significantly lower cost than a new build.
"It's disappointing that based on where we are at the moment, we seem to be unable to press on with the more viable economic option of a refurbishment, but we remain committed to finding the best possible long-term solution."
So if rebuilding is cheaper and the owners want to do it, what's the holdup? FoS correspondent David Dyte helpfully provides aerial evidence:
Note the housing surrounding the current stadium, and the relative wide open spaces of Stanley Park to the north. David observes that "'statutory obstacles' sounds like code for 'eminent domain is a pain in the ass in England' to me," and it looks like he's correct, more or less: A report in the Independent notes that Liverpool was looking at buying up properties around Anfield for an expansion, but that the club balked at requirements that they compensate local residents through a community benefits agreement, known in the UK as a Section 106 Agreement.
Liverpool city council leader Joe Anderson has now lashed back at Henry's team yesterday, declaring:
"You can't build something right next to someone's house that blocks daylight — whether Liverpool FC like it or not. That is something that exists. It existed 10 years ago when they were talking about it then, and it exists today.
"They are not our rules, they are national legal requirements. We will do everything we can to assist Liverpool FC and help them. ... There is a cost in redeveloping Anfield, they may have to wait three years before they can start. Even if it gets planning permission, that does not mean that people can't appeal. People have rights. They have to be able to object and there has to be a strong regeneration argument. You can't just move people out of their houses because you want a [redeveloped] stadium. There have to be wider benefits to the area, that includes jobs and the environment."
July 06, 2011
Nationals Park review: For this, you spent $686m?
Part of my travels last week involved a stop at the Washington Nationals' eponymous stadium on Saturday, for the second half (or more like second 60%) of a twi-night doubleheader against the Pirates. It was my first visit to Nationals Park, and my verdict is...
Meh. The D.C. stadium bears more than a passing resemblance to its HOK/Populous brethren Citi Field and Citizens Bank Park — stacks of club seats and restaurants behind home plate, overpriced shopping concourse in the outfield (complete with Blue Smoke and Shake Shack, just like in Queens), kids' play area — only without even those parks' moderate charms. The design is supposedly meant to evoke the glass-and-stone aesthetic of Washington's monuments, but when you replace actual granite with white-painted steel and cinderblocks, you just get drab.
The biggest problem, though, isn't the paint job but the grandstand design. Here's a photo from the upper deck down the first base line, which, being set lower than the behind-the-plate upper deck because there are no club seats forcing it skyward, should provide a decent view:
I was surprised to find myself lower vertically, but horizontally somewhere in Northern Virginia. The problem is in that lower deck, which you can see extends for something like 40 rows back before you get to the base of the upper levels. And because the upper decks have no overhang — apparently somebody thought that no one in D.C. in the summer would ever want to be in the shade — they're set back farther from the action than Stephen Strasburg is right now. (Of course, I would have expected this if I'd read my own blog posts.)
Nationals Park isn't an awful place to see a game: We ended up moving down to empty field-level seats along the left field line (ushers were thankfully far and few between), which only involved circumnavigating a handful of dead-end ramps and obtruding stadium clubs, and a fine time was had by all. Having been to RFK Stadium previously for a Nats game, however, I have a hard time seeing this as a big upgrade in terms of fan experience — let alone $686 million worth of upgrade.
And what of the much-hyped neighborhood redevelopment that was supposed to burst forth as a result of the new stadium? Well, right now it looks like this:
If you go to Harrison, New Jersey, you can see similar banners adorning similar chain-link fences outside the Red Bull New York soccer arena there. If nothing else, new stadiums are doing wonders for the Potemkin village rendering industry.
St. Paul council to wag finger at Vikings sales tax
Man, it really must be a slow news week: The headlines out of Minnesota (where the state government remains shut down over a budget impasse) are that the St. Paul city council plans to vote for a non-binding resolution opposing a sales tax hike in Ramsey County to pay for a new Vikings stadium. That'd be the same St. Paul city council that's already excoriated the stadium bill, and which has no actual say over the sales tax hike. And did I mention that the resolution is non-binding?
The move appears to be an attempt to push for more statewide funding for the Vikings, so that less of a share comes from Ramsey County; which would be a fine idea, except that 1) most of the economic benefits (meager though they may be) would come from stealing economic activity from surrounding counties, so on a state level it's even less worth funding, and 2) it's state legislators voting on this, and as noted, they already can't agree on how to spend their own money. Which is why we're talking about county money in the first place, just as happened with the Twins.
Over on the defense side, meanwhile, county commissioner Tony Bennett explained his sponsorship of a Vikings tax bill thusly: "I don't want to vote for the sales tax either, but what other choice do we have?" Let me think ... how about don't vote for the sales tax? Yes, that would risk the Vikings turning to Plan B in Minneapolis, but given that Ramsey County looks like it'd be taking a loss on building a stadium, that's the kind of risk that the county might want to take.
And, of course, there's always the possibility that if you say no to the Vikings, they'll sweeten the pot from their end. The Minneapolis Star Tribune writes that "reports on the behind-closed-doors talks have indicated the cost of the stadium may have dropped as low as $800 million while the Vikings' contribution increased." That still may not be enough to fill the $231 million funding gap, let alone reduce Ramsey County taxpayers' costs, but at least it'd be something.
July 05, 2011
Sacramento study shows $7B in arena gains $690m in arena losses
So it looks as if the big news during my hiatus was the release of a study by Sacramento Mayor Kevin Johnson's arena task force that claims $7 billion in economic benefits from a new Kings arena:
Advocates of a new downtown Sacramento sports arena rolled out a study Thursday that puts an eye-popping number on the building's projected economic benefits: $7 billion over 30 years.
[The study] said the new facility would shower the region with $157 million a year. That includes spinoffs such as sales at restaurants and hotels, as well as $6.7 million in taxes. ... The Sacramento study's author, Sacramento consulting firm Capitol Public Finance Group, contends that the downtown location would create considerable economic activity beyond the walls of the building itself. The arena would draw 3.1 million new visitors a year downtown, the report said.
The actual report is here. (Note that the task force has been renamed from Here We Build to Think Big Sacramento, apparently because they couldn't get the rights to the old domain name.) Actually reading it reveals a few details not covered in the Sacramento Bee article:
- It's not 3.1 million new visitors that the arena would be expected to draw each year, but rather 3.1 million visitors total. The report doesn't bother to say how many visitors the current arena gets.
- Likewise, the $7 billion a year in "economic benefits" is actually economic activity: in other words, the gross total of all spending in the greater Sacramento region by anyone going to a new arena, whether inside the gates, at local restaurants, etc. Net spending — in other words, money that would be new to the region — is actually estimated to be just 15% of that, a little under $25 million a year.
- That's economic activity, not revenue to Sacramento. Actual new sales and hotel tax revenue to the city is estimated at $1.7 million a year.
So, the plan here is to spend around $400 million (the task force hasn't decided yet how the money would be raised), which comes to around $25 million a year in bond payments, to build an arena that would only generate about that same amount of money per year in new economic activity — and which in tax revenue would bring in less than one-tenth of what taxpayers were spending. That's eye-popping, all right, but probably not in the way that the Bee meant it.
